U.S. equity markets opened on a softer note Tuesday following the long weekend, with major indexes weighed down by mounting investor anxiety about the potential disruptive effects of artificial intelligence on corporate earnings and economic sectors. Early trading saw the S&P 500 decline, and the Nasdaq Composite extend losses as technology shares came under pressure, signaling caution among traders at the outset of a truncated trading week. 

The downturn in risk sentiment was largely driven by fears that rapid advancements in AI could upend established business models and profit streams, particularly within technology and software industries. Reports noted that concerns about excessive valuations and over-investment in AI were prompting rebalancing across portfolios, especially among growth-oriented stocks. 

While the Dow Jones Industrial Average showed modest resilience in early trading, broader market sentiment remained subdued as investors weighed geopolitical developments, such as ongoing discussions between the United States and Iran, and potential implications for global economic stability. 

In pre-market futures, broader indexes also pointed to a cautious mood, with futures for the Nasdaq 100 and S&P 500 trading lower ahead of the official open. Positive moves in defensive sectors or those less exposed to AI disruption provided some offset, but overall trading reflected a risk-off stance among market participants. 

Analysts emphasize that despite this near-term volatility, the market backdrop remains complex: strong corporate earnings and underlying economic data contrast with the palpable uncertainty about how technological change will reshape profit dynamics across industries.